Patrick Moore: We want to get through the refurb and see the consequences of that, which we’re excited about.
Mark Fioravanti: Yes.
Bill Crow: All right. Thanks. That’s it for me. Appreciate it.
Mark Fioravanti: Thanks, Bill.
Operator: [Operator Instructions] We’ll hear from Jay Kornreich with Wedbush Securities.
Jay Kornreich: Hi. Thank you. Good morning. Looks like your future room bookings in the fourth quarter came in at VDR, it was like 8.5% above the prior year. So I’m curious now as we think about – in the year fourth year bookings in 2024, what kind of rate increases do you expect over 2023? And maybe also just remind us what percent of the total booking of that in the year — fourth year typically represents?
Patrick Chaffin: Yes. Hi, this is Patrick. So let’s start — there are a couple of questions there. We typically enter the year with about 50 points of occupancy on the books from a group perspective, and we book somewhere between 15 to 20 in the year – for the year, we expect that, that will be consistent with this year. From a rate perspective, just to give you a sense of – let me break it down this way and see if this answers your question, our RevPAR for 2024 assumes about one-third of the growth – our RevPAR growth assumes about one-third of that is coming from occupancy and about two-thirds of it is coming from ADR growth. And if you look at our RevPAR growth in total and the guidance we provided, about 45% of that is coming from group ADR growth alone.
So we’ve entered with a great position, and we believe that we will even further that position with some of these in the year – – year bookings. Our sales team is doing an outstanding job of pushing group rate, with the investments that we’re putting into the hotels, it further justifies that we’re not just raising and increasing pricing, but that we are enhancing the value proposition and groups are responding in a positive way to that. And we are very, very pleased with where group rate is heading.
Jay Kornreich: That’s very helpful. Thank you. And then just one other follow-up. You referenced fully overlaying the ICE! program on the JW Marriott Hill Country later this year in the fourth quarter. And so – I’m just wondering if you can give any context as to the EBITDA contribution upside you believe that can provide.
Mark Fioravanti: So when we enter into a market with ICE! for the very first time. It takes a little while to build the customer base, if you will. We see it takes two to three years. However, given the fact that Dallas is only about four hours away, our analysis of the markets and the MSAs indicates to us that this could be a strong performer for us. And so maybe a little bit better than what we would normally see, but I would say that we believe there’s somewhere between $3 million to $5 million of revenue and profitability opportunity from putting ICE! in at this property in the first year, and we’ll see how it goes.
Jay Kornreich: Okay. Thank you very much. That’s it for me.
Mark Fioravanti: Thank you.
Operator: Our next question will come from Smedes Rose with Citi
Smedes Rose: Hi, thanks. I just wanted to circle back on – you talked about kind of the cadence of RevPAR growth over the course of the year. So are we right in thinking that – – the first quarter will maybe be the weakest of the year followed by the fourth quarter, the second and third quarter being – your last two quarters. Is that the right way to think about just kind of the seasonality of earnings?
Mark Fioravanti: Yes, that’s correct, Smedes. You got that right.
Smedes Rose: Okay. And then I was just also kind of wondering – you talked about the capital projects. And then you’re doing a fair amount of work at the Rockies. And I guess the question is this, the need to go in and kind of make the property more accommodated group, it seems like it’s relatively new to have maybe misunderstood in the market or to misunderstand the kind of goods that were coming. And I’m just wondering, what do you ascribe that to? Is it just kind of live and learn and everything you just – you open and then you got to figure out what you have to do differently? Or is there something that you are particularly kind of pinpoint this year that you would have to put this much CapEx in when it’s still a relatively new property?
Mark Fioravanti: Yes. It’s not a misunderstanding of the groups. Keep in mind that we were a minority partner in the Rockies through the construction period. And then bought our partners out after opening. And really what we’re doing with the Rockies is that we’re taking essentially that Grand Lodge, which is the best real estate in that hotel and converting it from areas that are theming, that are not revenue-producing and converting that square footage into space that is sellable that we can generate revenue by servicing groups. So it will allow us to drive profitability, service more groups, so grand pavilion is an expansion of meeting space, which really speaks to the demand that we’re seeing there versus the original product that was built. So this is – it’s not that we misunderstood the market. I just – I think it really is more an issue of design and how that hotel was built and how they use the sellable square footage to maximize the profitability of the asset.
